domingo, diciembre 13, 2015

Why $2 a Gallon Gas? OPEC and the Frackers

By Karl GrossmanEXCERPT:As Alan Greenspan, former chairman of the Federal Reserve, has explained: “At the root of the price collapse was the development in the U.S. of technologies for extracting tight oil, mostly from shale deposits, by horizontal drilling and hydraulic fracturing. This reversed the decline in U.S. oil production.”“After the oil embargo of the 1970s,” Greenspan said, “OPEC wrested oil pricing power from the U.S.” But now, there’s been a “shale technology breakthrough.”“As a result, the gap between global production and consumption has widened, precipitating a rise in U.S. and world inventories, and a fall in prices. Saudi Arabia, confronted with an oil supply glut but not wishing to lose market share, abandoned its leadership role as global swing producer and refused to cut production to support prices.”Says Jamie Webster, an oil market analyst at HIS Energy in Washington, D.C.: “The faster you bring the price down, the quicker you will have a response from U.S. [fracking] production—that is the expectation and the hope. I cannot recall a time when several [OPEC] members were actively pushing the price down in both word and deed.”There are other factors, too.The descending price of oil has severely impacted on Russia causing some analysts to see collusion between the U.S. and Saudi Arabia to hurt the Putin regime in Russia—and some have extended this to seeing such a conspiracy also being aimed at major oil producers Iran and Venezuela, too.